Chapter $13$ Homework

Question $3$ of $7$

$\frac{-}{1\mathrm{.}3}$

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Current Attempt in Progress

Betty Harris Inc. has issued three types of debt on January $1,2025,$ the start of the company's fiscal year.

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$($a$)$ $$10$ million, $10-$year, $14\%$ unsecured bonds, interest payable quarterly. Bonds were priced to yield $10\mathrm{.}00\%.$

$($b$)$ $$27$ million par of $10-$year, zero$-$coupon bonds at a price to yield $10\mathrm{.}00\%$ per year.

$($c$)$ $$20$ million, $10-$year, $9\mathrm{.}00\%$ mortgage bonds, interest payable annually to yield $10\mathrm{.}00\%.$

Prepare a schedule that identifies the following items for each bond: $(1)$ maturity value, $(2)$ number of interest periods over life of bond, $(3)$ stated rate per each interest period, $(4)$ effective$-$interest rate per each interest period, $(5)$ payment amount per period, and $(6)$ present value of bonds at date of issue. $($Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124.$ Round stated and effective rate per period to $2$ decimal places, e$.$g$.10\mathrm{.}25\%$ and other answers to $0$ decimal places, e$.$g$.58,971.)$

Unsecured

Zero$-$Coupon

Mortgage

Bonds

Bonds

Bonds

Maturity

Current Attempt in Progress

On January $1,2025,$ Carla Company sold $11\%$ bonds having a maturity value of $$300,000\mathrm{.}00$ for $$335,934\mathrm{.}43,$ which provides the bondholders with a $8\%$ yield. The bonds are dated January $1,2025,$ and mature January $1,2030,$ with interest payable December $31$ of each year. Carla Company allocates interest and unamortized discount or premium on the effective$-$interest basis.

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